WASHINGTON — Federal Reserve Chairman Jerome Powell said Thursday that the economy is in a "good place" at the moment with low unemployment and inflation rising toward the Fed's optimal range. But he says rising trade tensions and higher tariffs could end up being a drag on growth.

In an interview for American Public Media's "Marketplace" radio program, Powell gave an upbeat assessment of the economy, in remarks signaling that the central bank's current pace of gradual interest rate increases should continue. The Fed has raised rates twice this year and is projecting two more rate hikes before the year is over.

"I think the economy's in a really good place," Powell said, noting that unemployment, currently at 4 percent, is at its lowest point in nearly two decades. "This strengthening, tightening labor market that you know we've been supporting with low interest rates has really been working for American workers and families."

Powell said that inflation, after a prolonged period of falling below the Fed's 2 percent target, has in recent months finally touched that goal, although he cautioned that he did not want to declare victory yet on the price front.

"Inflation has very gradually moved up and it's now just touching 2 percent. So we're really close to our target," Powell said. "I wouldn't say we've fully achieved it yet. We're not declaring victory there. We want inflation to be symmetrically around 2 percent, so just kind of reaching up and touching it once doesn't fulfill that goal."